If you’ve been scrounging around for a tax cut, then 13 might just be your lucky number.
February’s federal stimulus bill directs employers to withhold a little less from each worker’s paycheck, so the average American can expect a $13 boost in his weekly take-home pay beginning this month. The typical single will keep an extra $400 in 2009, while couples should double that break on average. Some employers implemented new withholding rules on Mar. 1, though the law doesn’t require everyone to comply until April 1.
There are, of course, a few catches.
First, the benefit will drop to about $8 per person in 2010, because it’ll apply to the whole year. Second, if you’re an individual earning more than $75,000 a year or a couple making more than $150,000 a year, the law doesn’t apply. Finally, because the tax break is coming from your withholding, you’re essentially getting April 2010’s refund now, spread out week by week for the remainder of 2009. That means you probably won’t get a big lump sum a year from now. And depending on your situation, it also means you could end up owing Uncle Sam. Check with your accountant or your human-resources department if you’re concerned about your 2009 tax liability.
The Review-Journal on Friday asked locals and tourists at the Meadows Mall, Boca Park and the Fremont Street Experience: How big a difference will the tax break make in the economy and in your finances, and how will you spend it?
I just don’t feel like it’s going to be a big enough impact right now to help with what’s going on around us. I’m grateful for the money, but it would be better if it was like the last time (May 2008), when we got a whole lump sum. I’d rather get a big check, because you can do more with it than you can with an extra $10 trickling in here and there. With the extra money, I might go to Burger King, maybe. With my big check last year, I got caught up on all my bills.
I understand we’ll get an extra $250 (for the year) on Social Security, that’s our equivalent. It would make no difference whatsoever. It’s not enough money to do anything with. I guess it would make a difference for a family with kids. I’d rather they take that money they’re giving to the banks, which is not going to do any good for anybody, and give $250,000 to everyone in the United States. That would take care of everything. People would have the money to buy houses and cars.
Grocery store floral manager
It would buy me two Starbucks (drinks), and that’s a big deal to me, considering how much I spend at Starbucks. I think any money in my pocket is a good idea. It doesn’t really matter how much. More would be nice, but I’m not going to complain.
Student, worker at employment program for vets
It would help me with my college budget and give me a little more spending money to play with. But I don’t think it’s the best way to stimulate the economy. I think encouraging people to spend and not scaring people is going to help them more than giving them $13 a week. (Government leaders) need to make people confident that their spending is actually going to help the economy.
Student, part-time business manager of apartment communities
When you’re in college, you’re on a very fixed budget, so $13 a week is not going to do very much. I might buy an extra case of beer or go out for dinner. In our apartment complexes, we have residents who are really struggling, who are on unemployment. It really isn’t going to help them much, but every little dollar does count. My feeling is that the housing market kind of runs the economy. If people aren’t buying houses, they’re not spending money elsewhere. Housing is where the big money is.
Americorps stipend worker
It would help, because I’m broke. It’s $13. It helps. I’ll probably buy food with it. I don’t know if (the tax break) is a good idea yet.
Contact reporter Jennifer Robison at firstname.lastname@example.org or 702-380-4512.THE CATCH
First, the benefit will drop to about $8 per person in 2010 because it’ll apply to the whole year. Second, if you’re an individual earning more than $75,000 a year or a couple making more than $150,000 a year, the law doesn’t apply. Finally, because the tax break is coming from your withholding, you’re essentially getting April 2010’s refund now, spread out week by week for the remainder of 2009. That means you probably won’t get a big lump sum a year from now. And depending on your situation, it also means you could end up owing Uncle Sam.